Estimating Audiences for a Hypothetical Arts Facility
I was presenting a needs assessment to a municipal cultural client the other evening. These assessments tackle a series of demand and supply issues as well as broader questions of how and why an additional arts facility may be good for a community. The hardest issues often relate to potential audiences.
There is no market for a building itself. We are looking for a market for the programs and activities that might come to a building. How do we calculate that potential? The first thing is to get a sense of the market size, both in terms of density and geography. How far will people be willing to travel to our venue? We project how large that market might be in 10, 20, even 30 years.
Then we dig into the demographic characteristics of the defined market area, in terms of factors like age, income, educational attainment and ethnicity. There is good information publicly available from the National Endowment for the Arts’ Survey of Public Participation in the Arts (another reason to save the NEA) that tells us how these factors drive attendance and how various attributes might predict participation. Using data from large market research firms, we can also project how the market might change over time.
The next step is to look at the geo-demographics of the market for which there are various products created by large market research companies. Nielsen’s PRIZM is described as a lifestyle segmentation system that breaks down households into 66 clusters based on socioeconomic rank, taking into account characteristics such as income, education, occupation and home value, urbanization, age, and the presence of children at home. Even though there are still limitations to the model, national research suggests how often households in each cluster attend certain types of events. This process gives us a rough yet valuable approximation of how many people currently attend certain types of programs.
The hardest challenge is defining and forecasting competition. We compare one market area to others. After identifying places with similar size and characteristics, we consider what sorts of facilities they support and then draw basic conclusions on whether our market might be over or under-supplied with facilities. Primary research can help. It’s certainly easier with various online tools like Zoomerang and Survey Monkey. As long as we can get a survey out to a sample population with a minimal potential for bias (easier said than done), then we might be able to predict some level of audience demand for certain programs in certain spaces.
We also address the question of the non-resident audiences, such as tourists. In the rare situation where good data exists on the number, characteristics and behavior of visitors, we can say something about the potential to attract them to events as well.
Cities want facilities that are magnetic in their draw.
We try to present our findings with a series of limitations in mind, noting that markets change over time and not necessarily in predictable ways. There’s also the product problem, in that we don’t really know if a new facility will produce or present programming that fit the market in terms of quality and pricing. Plus the product itself is changing: we consultants are observing a major shift away from some traditional Western-European performing arts disciplines, such as symphonies, ballet and opera, towards more popular entertainment coming from a wider range of cultures. Then there’s the problem that most nonprofit producers and presenters have limited skills and resources as marketers. Many cannot effectively promote their events to the best-fit of their audiences.
There are many things that people might choose to do instead of coming to a live performance, from going to a movie to attending a hockey game. Our task is to guess what the most likely alternatives will be in a given place and then to project the market share required in order to support a new facility.
Back to the other night’s session. After all of our maps, charts and graphs, we concluded that the market was large, growing and had the potential for additional participation in the arts — both passive (attend a performance) and active (take a class). One senior manager then piped up. “Can’t we do something that creates it’s own market?,” he asked. And I knew what he was going to ask next: “Why not just build it and they will come?” If I had a nickel for every time someone used that awful line…
It took me a minute to stop grinding my teeth and to recognize that his first question was, in fact, a good one. All cities want a facility that is distinctive and magnetic in its draw, but they also want one that will not put public funds at risk. So how do we manage that? Stay tuned for my next article.